You’ve Saved for the Down Payment—But What About the Rest?

You finally found the perfect home. You’ve got your down payment ready, your loan pre-approval in hand, and you’re dreaming about furniture placement.

But here’s what surprises many first-time buyers: the down payment is just the beginning. When you buy a home, there are hidden costs that can sneak up on you—and eat into your budget fast.

As a real estate agent, I’ve walked hundreds of buyers through this process. I always make sure my clients aren’t just prepared to buy the house, but to own it with confidence.

Let’s break down the top 10 hidden costs of buying a home, so you can budget wisely and avoid that “wait, I owe how much?” moment at closing.

1. Closing Costs (They're Not Just for Sellers)

Many buyers think only the seller pays closing costs—but that’s not the full picture.

As a buyer, you’ll likely pay:

• Loan origination fees


• Title insurance (lender’s policy)


• Escrow fees


• Attorney fees (in some states)


• Recording and transfer fees

?? Budget: 2–5% of the purchase price.

?? Tanya’s Tip: Ask your lender for a Loan Estimate early in the process so you’re not caught off guard.

2. Inspection Fees

A home inspection is optional—but absolutely essential.

You’ll want to pay for:

• General home inspection


• Pest inspection (especially in warmer climates)


• Sewer scope or septic inspection


• Radon, mold, or lead paint testing (depending on area)

?? Budget: $400–$1,000 depending on the home size and number of inspections.

3. Appraisal Fee

Your lender requires an independent appraisal to confirm the home’s value. This cost is typically paid by the buyer upfront.

?? Budget: $400–$700

?? Heads-up: If the appraisal comes in low, you may need to renegotiate or bring more cash to the table.

4. Earnest Money Deposit

Also called a “good faith deposit,” this is money you put down with your offer to show you're serious. It goes toward your purchase, but you’ll need to have it ready immediately after going under contract.

?? Typical Amount: 1–3% of the home’s purchase price.

?? If you back out for a reason not covered in the contract, you could lose it.

5. Title Insurance (Lender’s Policy + Optional Owner’s Policy)

You’ll be required to pay for a lender’s title policy, which protects the bank. I always recommend buyers add an Owner’s Title Policy to protect themselves, too.

?? Cost: $500–$1,500 depending on your location and loan amount.

?? It protects you from future claims against your property like unpaid liens or past ownership disputes.

6. HOA Fees and Transfer Charges

If the home is in an HOA (Homeowners Association), you may owe:

• Monthly HOA dues


• One-time transfer fees


• Document fees

?? Budget: $200–$1,000 at closing, plus ongoing monthly dues ($100–$600/month on average).

?? Always review the HOA rules, financials, and any pending litigation before closing.

7. Prepaid Property Taxes & Insurance

Lenders require you to prepay several months of property taxes and homeowners insurance at closing. These are part of your escrow account.

?? Typical Escrow Prepay: 3–6 months’ worth of taxes and insurance.

?? Bonus Tip: This is why your closing costs are often higher than expected.

8. Home Warranty (Optional, But Smart)

A home warranty isn’t required, but it’s a smart option—especially for older homes.

It covers appliances and systems (like HVAC, plumbing, electrical) for one year after closing.

?? Cost: $500–$700 for a basic policy

?? Sometimes you can negotiate the seller to pay for it!

9. Moving Expenses

Whether you’re moving across town or across the country, don’t forget to budget for the move.

• Moving company or truck rental


• Packing supplies


• Storage unit (if needed)


• Utility deposits and service setup

?? Budget: $500–$5,000 depending on the size and distance of your move.

10. Post-Move Fixes & Furnishings

Even if the home is move-in ready, you’ll likely spend money on:

• Paint


• New locks


• Blinds or curtains


• Furniture


• Light fixtures


• Smart home upgrades

?? Set aside a buffer fund: $1,000–$3,000 minimum.

Related Articles on My Site

• How to Avoid Buyer Cold Feet at Closing


• What Does a Title Policy Actually Cover?


• First-Time Buyer Mistakes to Avoid

Trusted External Resources

• Consumer Finance Protection Bureau – Mortgage Tools


• National Association of Realtors – Home Buying Guide

Conclusion: Be Ready, Not Rattled

Buying a home is a huge milestone—but don’t let hidden costs derail your joy.

The more you understand what’s coming, the more confident you’ll feel at every step. Talk to your agent. Ask your lender questions. And always build in a buffer—because homeownership doesn’t end at the closing table.

TL;DR

Buying a home involves more than the down payment. Expect to pay for inspections, title insurance, prepaid taxes, and more. Plan ahead and keep a buffer in your budget to avoid surprises.

Top 10 FAQs

1. What are closing costs for buyers?

They include lender fees, title insurance, escrow fees, and prepaid taxes—typically 2–5% of the purchase price.

2. Do I need an inspection if the home looks fine?

Yes—hidden issues can cost thousands. Always get an inspection.

3. Can I negotiate closing costs?

Sometimes. You can ask the seller to cover some costs or look for lender credits.

4. What is earnest money?

A deposit that shows you're serious. It goes toward your purchase if the deal closes.

5. What does title insurance cover?

It protects against ownership disputes, liens, or recording errors from the past.

6. Is a home warranty worth it?

For older homes, yes. It can save you thousands in your first year.

7. How much should I budget for moving?

Anywhere from $500–$5,000 depending on your situation.

8. What are prepaid costs?

Taxes and insurance you pay upfront at closing to fund your escrow account.

9. Can I roll these costs into my mortgage?

Sometimes—but it depends on your loan type and lender.

10. What’s a good buffer fund amount?

$3,000–$5,000 gives you a solid cushion for unexpected expenses.